UK-based fintech player Wiserfunding is set to enter the Indian market and will invest $3 to 5 million over the next three years to tailor credit-risk models for small businesses, the company said on August 3.
The company, using artificial intelligence, aims to reach an accuracy of more than 80 percent while evaluating these businesses, which are struggling for funds following the coronavirus outbreak, since banks have been slow in offering them loans.
“It will be important to have a reliable assessment of businesses’ viability and Indian banks and financial institutions will definitely see a significant benefit in using a more independent and unbiased risk assessment platform,” Edward Altman, cofounder, Wiserfunding, said.
A professor emeritus at New York University's Stern School of Business, Altman is a pioneer in credit-risk analytics and the inventor of Z Score, also referred to as Altman Z Score.
The Z Score is a method to predict bankruptcies, used by traders and bankers to evaluate the effectiveness of financial models and businesses.
The London-headquartered company will create a technology platform to connect public and private databases to automate their lending models.
The plan is to partner with around four banks and 10 non-banking players, targeting 85 lakh small businesses by the end of the financial year.
The Z-Score platform for small and medium enterprises (SMEs ) uses artificial intelligence to provide reliable credit risk assessment tools, which can be used to evaluate the quality of the business through transaction history and public data.
The model provides geographical and sectoral segmentation to be designed specifically for SMEs.
This is Wiserfunding’s first office outside the UK and will be headed by Avantika Goel, who is relocating from London to Mumbai.
Wiserfunding aims to target bank and non-bank lenders, investors, funds, insurance companies and SMEs.
It has been operating in 38 countries, with clients in the UK, Italy, Portugal, Germany, Netherlands, Poland, Latvia, Singapore, Thailand and South Africa.
The company’s solution has been adopted by more than 40 bank and non-bank lenders and investors across the world.